Is It Too Late to Invest in Paramount Skydance After Its 48% Rally in 2025?
November 16, 2025
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Wondering if Paramount Skydance is still a bargain, or if you’ve already missed the best of its run? You’re in the right place to dig into what really drives its value.
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Shares have soared 48.2% year-to-date and are up 46.9% over the past year, with short-term shifts of 3.8% in the last week but a -6.5% dip over 30 days.
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One of the biggest stories surrounding the stock has been the growing excitement over its newly announced collaborations with major streaming platforms, which added fuel to recent rallies. Meanwhile, ongoing speculation around a potential industry merger has kept investors watching closely for what comes next.
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Paramount Skydance scores a 4 out of 6 on our latest undervaluation checks, hinting at some upside but leaving room for debate about its true worth. Let’s break down the common ways to value stocks, and stay tuned for one perspective you won’t want to miss at the end.
The Discounted Cash Flow (DCF) model estimates a company’s worth by forecasting its future cash flows and discounting them back to today at a rate that reflects their risk. This approach is particularly useful for companies like Paramount Skydance, as it allows investors to gauge long-term value based on data-driven projections.
Paramount Skydance generated $305 million in Free Cash Flow (FCF) over the last twelve months. Analysts anticipate significant swings in the coming years, with projected FCF of $944 million in 2029. Looking even further out, FCF is expected to exceed $1.47 billion by 2035. It is important to note these later figures rely on Simply Wall St extrapolations rather than direct analyst estimates.
After discounting these projected cash flows back to their present value, the DCF model arrives at an intrinsic value of $19.25 per share. With the stock currently trading at an 18.5% discount to this estimate, the DCF model indicates Paramount Skydance is undervalued relative to its future cash-generating potential.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Paramount Skydance is undervalued by 18.5%. Track this in your watchlist or portfolio, or discover 894 more undervalued stocks based on cash flows.
The Price-to-Sales (P/S) ratio is a widely used valuation tool, especially for companies that may not report consistent profits but generate strong revenues. By comparing a company’s market value to its sales, investors can gauge how much they are paying for every dollar of revenue. This is particularly helpful in the media sector, where earnings can be volatile due to factors like content spending or industry cycles. However, revenues remain a meaningful benchmark of business scale and growth opportunity.
Growth expectations and perceived risk play a significant role in determining what qualifies as a “normal” P/S ratio. Companies with strong growth prospects or differentiated business models typically trade at higher multiples. Those facing industry headwinds or heightened risks command lower ones. Thus, benchmarking without context can sometimes paint an incomplete picture.
Paramount Skydance currently trades at a P/S ratio of 0.60x, noticeably below both the industry average of 1.05x and the peer average of 1.07x. Simply Wall St’s proprietary Fair Ratio model, which analyzes deeper factors such as growth, margin profile, market capitalization, and risk, estimates a fair multiple at 1.62x for Paramount Skydance. Unlike raw averages, the Fair Ratio adjusts for the nuances specific to each business, providing a clearer indication of intrinsic value.
Comparing the actual P/S ratio to the Fair Ratio, the stock appears undervalued, as its current multiple is well below where Simply Wall St believes it should be trading based on its unique fundamentals.
Result: UNDERVALUED
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Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives. A Narrative is your own story about a company, connecting what you believe about its future to real financial forecasts and a fair value estimate. By putting your perspective on revenue, earnings, and margins into the numbers, Narratives turn analysis into something personal and actionable.
Narratives are an easy and accessible tool available to everyone on Simply Wall St’s Community page, where millions of investors share their view on what drives a company’s potential. Each Narrative links the company’s story to a financial model, so you can directly compare your Fair Value to the current stock price and see if it is the right time to buy or sell based on your expectations.
Best of all, Narratives update automatically whenever new news or earnings data comes in, keeping your view current and responsive. For example, one investor might see Paramount Skydance as worth $24 per share, while another values it at $13, reflecting their differing views on future growth, risks, and opportunities. Narratives help you invest according to your own beliefs, with tools that make it simple to act on them.
Do you think there’s more to the story for Paramount Skydance? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include PSKY.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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